BRITAIN’s exporters, on the face of it, are not getting much of a look-in in China. Beijing’s roads are crowded with imported cars, but few of them started their journey in Britain.
Volkswagens, many of them produced in China, are ubiquitous. Audis are the car of choice for many Chinese businessmen on the way up. Younger people seem to like Citroëns. Peugeots are also a common sight.
Most of all there are Japanese cars: Nissans, Toyotas and Hondas. While Britain has plants producing all three of these brands, they are exported to Europe, not to the Far East.
But Rovers, despite the battle over the Chinese acquisition of Longbridge, are a rare sight. British-built BMW Minis are said to be sought-after but their high price means they are few and far between on the streets of the Chinese capital.
Britain, in fact, does not appear to be making much headway in the fast-growing Chinese market, with its 1.3 billion people and rapidly growing middle classes.
Most of the visible brands are American, Japanese or mainland European. A prestigious shopping mall in Beijing’s World Trade Centre, where Gucci, Mont Blanc and Armani rub shoulders with Calvin Klein, Prada and Ferragamo, is notably short on British names.
The figures, too, suggest that Britain is barely scratching the surface. Last year UK exports to China totalled £2.8 billion — just 1.3% of all exports. Britain is pulling her weight only when it comes to imports from China, which were £13 billion last year, 4.6% of all UK imports.
Beijing-based officials from UK Trade & Investment, the government body that encourages exports and inward investment in Britain, insist that the UK is doing better than the raw trade figures suggest.
UK firms, for example, lead the way among European countries when it comes to investment in China, with 5,000 projects adding up to a combined value of more than £7 billion. While exports to China remain a tiny share of overall overseas trade, so far this year they are up by 24% on the same period in 2005. Companies like ARM, which supplies high-tech components to China’s mobile-phone industry, have seen exports increase sharply.
Service-sector exports, which is where Britain’s competitive advantage may lie, rose by 54% in 2003-5.
A visit to China this week by Margaret Hodge, a Department of Trade and Industry minister, will coincide with the launch of a series of Penguin “Spot” books for children, after a range of Penguin classics were published there. Earlier this month Bupa established an office to tap into what is expected to be a rapidly expanding market for private medical insurance.
But it is in areas such as China’s huge infrastructure programme, including the construction of facilities for the 2008 Olympics, that British firms are doing particularly well. On Wednesday, Arup, the UK-based design and engineering consultancy, signed a deal to design the new Yunnan Kunming International airport. The agreement, signed at 10 Downing Street during the visit to Britain of Wen Jiabao, the Chinese premier, will see Arup work alongside a Chinese design institute.
The scale of the project, as with many in China, is huge. It is set to become the fourth-largest airport hub in China, handling more than 60m passengers a year by 2035.
This will not be the firm’s first big success in China. It has already worked on more than 300 projects in mainland China, including sports venues, hotels, offices, airports, libraries, power stations, bridges, motorways and railways.
Some of its projects will be firmly in the glare of international publicity in two years’ time, when the Olympics are held. They include the strikingly original new Olympic stadium, the National Swimming Centre and the CCTV Tower, another highly original design.
Passengers flying into Beijing will arrive at the new Terminal 3 in the city’s Capital International airport, one of half a dozen airport projects the firm is working on in China.
It is also designing and masterplanning the city of Dongtan, near Shanghai, said to be the world’s first environmentally friendly “eco city”, with the prospect of three more similar projects in the pipeline.
“Arup is at core a learning organisation and we know that in China this is a two-way process,” said Terry Hill, Arup’s chairman. “Having worked in China for 30 years we have the experience to succeed, but I feel we are only just beginning. We bring our global experience in high-rise, airports, sport and sustainability to China, and it in turn teaches us.”
Britain is also taking steps to make sure it benefits from the opening up of China’s market in financial services. David Brewer, the lord mayor of London, returned this weekend from leading a two-week City delegation to China, which took in Beijing and Shanghai, as well as the regional cities of Tianjin, Shenyang and Dalian.
Tianjin, near Beijing, has been designated by the Chinese government as the next major financial centre after Shanghai and Shenzhen.
Shenyang and Dalian, in northeast China, have traditionally been associated with heavy industries but have ambitions to develop their own regional financial centres.
“All these cities have the needs and resources to be regional financial centres,” said Brewer. “By working closely with the City of London, north-eastern China will grow a lot more rapidly in economic terms, which will help bring common prosperity for all.”
The lord mayor, who has visited China more than 100 times on business, led a delegation of more than 60 from leading UK-based firms in the financial- services sector, and met key figures in banking, insurance and financial services as well regulators and political leaders.
Michael Snyder, the City of London Corporation’s chairman of policy and resources, has established three representations for UK-based financial services in Beijing, Shanghai and Shenzhen.
“Our latest City delegation, headed by the lord mayor, was the largest ever and this reflects the demand by City firms for deeper and wider links with business, institutions and politicians in and across China,” he said. “There’s no doubt that China — as it develops and reforms — has an enormous need for capital and expertise. And the City of London is well placed to fulfil that need — to China’s great benefit and our own.”
So Britain is doing better than it seems to be. The UK’s invisibility is, however, still frustrating for those promoting the country’s interests in China.
“We’d like to see a bit more branding of UK plc in China across the board,” said Guy Dru Drury, head of the Confederation of British Industry’s office in Beijing.
“In this market, you have to say it again and again — you can get away with being a bit over the top in China.
“Businesses would love to see us being more engaged. We haven’t seen a lot of that yet.”
